What Are You Doing for National Financial Literacy Month?

Financial literacyApril is National Financial Literacy Month, and we think that’s a great time to remind you that many American adults lag behind on maintaining healthy financial habits. If that sounds harsh, that’s because it is. But it’s also reality.

According to a recent study by the Global Financial Literacy Excellence Center, the average American adult could correctly answer only about half of the questions on the center’s Personal Finance Index survey, which gauges financial literacy.

What’s more, an InvestmentNews survey revealed that more than 95 percent of financial advisers agree that financial illiteracy is an issue in our country. However, just 41 percent of the polled advisers were involved in initiatives related to improving financial literacy in their communities.

The lack of financial literacy among American adults is why the U.S. Senate initially designated April as Financial Literacy for Youth Month in 2003 and officially recognized it as National Financial Literacy Month a year later.

Yet financial literacy still lags even 15 years later. Let’s dig a little deeper into what financial literacy is, why it matters and what your bank or credit union can do to help.

What Is Financial Literacy?

Financial literacy is exactly what it sounds like: the education about and understanding of financial topics, particularly in the personal finance area. Financially literate adults should be able to efficiently manage their money by making smart decisions with their budgets, savings, debts and investments.

Should Financial Literacy Matter to You?

Of course! Your bank customers and credit union members who make poor financial decisions are more likely to be overwhelmed with debt, face numerous overdraft fees and potentially go into bankruptcy protection. This can be especially bad for you if your organization is the loan holder. Smarter customers and members who make good decisions keep money in your bank, pay their debts and help your bank or credit union grow.

How Can You Improve Financial Literacy?

As with all relationships, communication is key. Maintaining an open line of communication to help your customers and members understand important financial topics will improve their situations as well as protect your institution. A regular email newsletter with helpful information for your customers and members can educate them, improve their experience with your organization, and keep them in the fold. Just be sure the information you send is compliant with regulatory guidelines.

It’s not too late to engage your customers for National Financial Literacy Month. In fact, we’d recommend keeping them in the loop year-round.

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